I recently encountered this error, and in the process of troubleshooting, developed this one-line to reproduce the problem. I'm including it here for posterity (and in case anybody wants to test a given version of Python for the error):

python -c "from distutils.core import setup; setup(name='foo.project', version='1.0', url='http://www.example.com', author='Foo', author_email='foo@example.com', long_description = u'\xc0',)" check -r